Local Service Agent (LSA) in Dubai 2026 Explained

It depends on your legal form, not just your activity. For most commercial and industrial LLCs, no: the 2021 Commercial Companies Law reforms made 100% foreign ownership the default, so no LSA is required. A local service agent is still mandatory for a professional sole establishment owned by a non-GCC national and for a branch or representative office of a foreign company. The only reliable way to know is to check your specific DET activity code and structure, which we do before you pay for anything.

An LSA is a fixed annual fee, with many agents quoting from around AED 5,000 and rising to roughly AED 25,000 depending on the activity, legal form and the agent, agreed in writing and recurring each year with the licence. It is never a share of profit or revenue. If anyone quotes you a percentage of earnings, that is the old 51/49 sponsor model, not a legitimate local service agent arrangement.

No. A local service agent holds 0% of shares and has no claim on profit, dividends or assets. You retain 100% ownership of the company. The agent's role is limited to liaising with government bodies for licensing and visa formalities on a professional sole establishment or a foreign-company branch. Pairing the LSA agreement with a power of attorney to yourself keeps full management and banking control in your hands.

A local sponsor was the UAE national who held 51% of an LLC under the pre-2021 rules and shared in profit and control. A local service agent holds no equity, takes no profit, and only assists with government formalities for a fixed fee, typically on a sole establishment or branch. The reforms largely abolished the mandatory 51% sponsor for mainland LLCs, so today most founders need neither, and those who need an LSA face far lower risk.

Notarise a clear LSA agreement that fixes the annual fee, defines the limited role, and sets a long renewal term so the fee cannot be raised under pressure. Pair it with a power of attorney that keeps management, signatory and banking authority entirely with you. Never rely on a verbal deal or a copy-paste template, and never accept any profit or revenue share. Done correctly, the arrangement carries minimal risk.